(Adds dateline, byline, comment in paragraphs 8-9, updates prices at 11:35 a.m. ET (1635 GMT)

* Nvidia crosses $2 trillion valuation, then slips

* MSCI ACWI, STOXX 600 hit new highs

* Dollar heads for first weekly fall of 2024

NEW YORK/LONDON, Feb 23 (Reuters) - A gauge of global equity markets lost steam on Friday after setting a new intraday high as optimism over Nvidia's results faded while the dollar index was steady as Federal Reserve officials indicated rate cuts will come later than expected.

Wall Street's main indexes earlier extended gains as Nvidia shot above $2 trillion in market value for the first time, driven by the AI frenzy that has gripped markets since the chipmaker's blockbuster quarterly report two days earlier.

Nvidia later traded little changed, last up about 1%.

Equity markets also advanced after data showed U.S. services sector growth picked up in January as new orders increased and employment rebounded, though a measure of input prices rising to an 11-month high.

MSCI's all-country world index, a gauge of stock performance worldwide, was up 0.14% after earlier shooting to a new high.

The combination of strong growth and inflation not yet slowing to the Fed's 2% target has led Fed officials to push back on rate cut expectations.

Fed funds futures show a 52.3% chance of a cut in June, with a 34.7% probability of no cut, a sharp reversal from bets on Feb. 1 of a 62% chance of a cut in March, according to CME Group's FedWatch Tool.

"When you look at the speeches that we've gotten over the last two days here from the Fed, they want to be very clear that they have inflation down to their goal," said Stan Shipley, fixed-income strategist at Evercore ISI in New York.

"Since the economy is so strong, they see no reason why should they cut rates until they are sure," he said.

The pan-European STOXX 600 index rose 0.37%, on track for its fifth straight week of gains and a new closing high.

On Wall Street, the Dow Jones Industrial Average rose 0.32% and the S&P 500 gained 0.09%, but the Nasdaq Composite dropped 0.19%.

The dollar was poised to record a weekly fall for the first time in 2024 on Friday as investors consolidated positions and sought further guidance on global economies.

The dollar index was flat, with the euro unchanged at $1.0823.

On the data front in Europe, German business morale fell unexpectedly in Europe's biggest economy in December, an Ifo institute survey showed.

German bond yields were on track for their third straight weekly increase on Friday as the economic data and central bank officials continued to chip away at investors' hopes for rapid interest rate cuts by the European Central Bank this year.

Japan's stock market was closed for a public holiday on Friday, but Nikkei futures rose nearly 1%, suggesting Japanese stocks will extend their record run next week.

Chinese shares wobbled between gains and losses. The Shanghai Composite index rose above the psychologically key 3,000-point mark. It is up 4.6% for the week and has bounced about 10% from five-year lows set more than two weeks ago.

Hong Kong's Hang Seng index slipped 0.1%.

Data showed on Friday that China's new home prices fell for the seventh month in January, leaving sentiment fragile as policymakers' efforts to restore confidence in the debt-ridden sector struggled for traction.

A Reuters poll showed that the recent rally in global stocks had a little further to go but they were divided on whether there would be a correction in the next three months.

The two-year Treasury yield, which reflects interest rate expectations, fell 2.2 basis points to 4.692%, while the yield on the benchmark 10-year note was down 6.5 basis points at 4.262%.

The 10-year hit a three-month high of 4.3540% overnight.

U.S. crude fell 1.68% to $77.29 per barrel and Brent was at $82.35, down 1.58% on the day.

(Reporting by Stella Qiu; editing by Shri Navaratnam, Neil Fullick, Jane Merriman and Mark Heinrich and Marguerita Choy)